DIRS.INFO The most relevant business & tech news

☆ Analysis: Banking woes, Fed keep U.S. market investors on edge
▼ + stars: | 2023-03-25 | by ( David Randall | ) www.reuters.com time to read: +5 min

But investors are guarded, wary that another bank run could erupt if people believe U.S. or European regulators won't protect depositors. Uncertainty over the Fed's intentions is amplifying investors’ hesitation in stocks and sparking huge swings in U.S. government bond prices. The Fed raised rates by 25 basis points on Wednesday but indicated it was on the verge of pausing further increases. Risk assets have been somewhat resilient despite the concerns in the banking sector, said Jason England, global bonds portfolio manager at Janus Henderson Investors. England expects longer-duration bond yields to start to rise from current levels, making short-term bonds and money market funds more attractive.

WASHINGTON/NEW YORK, March 25 (Reuters) - The banking crisis set off by the swift collapse of Silicon Valley Bank (SIVB.O) has exposed a sharp disconnect between Washington and Wall Street. Some critics are asking whether the Biden administration could have contained the crisis with aggressive actions at the start. FINDING A BUYER FOR SVBThe failure of the nation's 16th largest bank caught regulators off guard. The banking industry itself is not united on how to reassure depositors. The banking industry is searching for sweeping relief to calm markets, while Washington is discussing how to prevent the next crisis.

☆ Deutsche Bank, Credit Suisse, and what to know about the financial turmoil — and how one company is working to boost the number of women on Wall Street
▼ + stars: | 2023-03-25 | by ( Phil Rosen | ) www.businessinsider.com time to read: +5 min

The program collaborates with UPenn's Wharton business school, and it teaches college women the fundamentals of markets, portfolio management, and finance. Katherine Jollon Colsher, President and CEO, Girls Who Invest Girls Who InvestKatherine Jollon Colsher is the chief executive officer and president of Girls Who Invest, a nonprofit that aims to help women enter asset management and other careers across Wall Street. Katherine Jollon Colsher: We work exclusively in the buy side, and we do focus exclusively on placing women in internships and frontline investing roles to advance more women portfolio managers. With that, our vision is for 30% of the world's investable capital to be managed by women by 2030. Shares of the German bank tumbled on Friday, as the cost of credit default swaps linked to its bonds shot higher.

The fresh price falls in Europe came as investors were looking to see how far U.S. authorities would go to shore up the banking sector, particularly fragile regional lenders. REUTERS/Dado Ruvic/Illustration/File Photo 1 2CDS surge on banking sector turmoilUBS CHALLENGESThe global banking sector has been shaking since the sudden collapse this month of SVB and Signature Bank. But the worries spread quickly, and on Sunday UBS (UBSG.S) was rushed into taking over Swiss rival Credit Suisse after it lost the confidence of investors. Separate sources told Reuters that UBS has promised retention packages to Credit Suisse wealth management staff in Asia to stem a talent exodus. Standard Chartered (STAN.L) Chief Executive Bill Winters said on Friday the wipeout of Credit Suisse bondholders had "profound" implications for global bank regulations.

The global banking sector has been rocked since the sudden collapse this month of two U.S. regional banks sparked fears of contagion to other lenders. Separate sources told Reuters that UBS has promised retention packages to Credit Suisse wealth management staff in Asia to stem a talent exodus. Credit Suisse and UBS declined to comment, while the Justice Department did not immediately respond to Reuters' emailed requests for comment. The takeover of Credit Suisse has also ignited broader concerns about investors' exposure to a fragile banking sector. Standard Chartered (STAN.L) Chief Executive Bill Winters said on Friday the wipeout had "profound" implications for global bank regulations.

The index of top European banks (.SX7P) was down 1% in early trading, with German banking giants Deutsche Bank (DBKGn.DE) and Commerzbank (CBKG.DE) both falling 0.8%. The rescue of Credit Suisse, which followed the collapses of California-based Silicon Valley Bank (SVB) (SIVB.O) and New York-based Signature Bank (SBNY.O) ignited broader concerns about investors' exposure to a fragile banking sector. The decision to prioritise shareholders over Additional Tier 1 (AT1) bondholders rattled the $275 billion AT1 bond market and some Credit Suisse AT1 bondholders are seeking legal advice. "The AT1 instruments issued by Credit Suisse contractually provide that they will be completely written down in a 'viability event', in particular if extraordinary government support is granted," FINMA said. However, some watchers think the banking system is more vulnerable to rumour and rapid moves in an era of widespread social media use, posing a challenge for regulators trying to tamp down instability.

U.S. West Texas Intermediate (WTI) crude rose 64 cents, or 0.9%, to $70.31. The U.S. dollar fell to its lowest level since Feb. 3 against a basket of other currencies, supporting oil demand by making crude cheaper for buyers using other currencies. "The big story here is that build ... in crude, which is enough to get us to the 22-month high in crude oil storage. We just have a lot of crude oil in storage and it's not going to go away anytime soon," said Bob Yawger at Mizuho, a bank. An emergency rescue of Credit Suisse Group AG (CSGN.S) over the weekend helped revive oil prices.

☆ Here are 3 important reasons why stocks shouldn't be rallying in the wake of bank bailouts, and why bond investors are right to be bearish, according to Morgan Stanley
▼ + stars: | 2023-03-22 | by ( Marley Jay | ) www.businessinsider.com time to read: +5 min

Stocks have risen as investors conclude that authorities will prevent a bank crisis from spreading. He says that tighter credit conditions and the economy will weaken, and stocks look expensive. While bank stocks are still down, the rest of the market is collectively higher since the crisis started. But even if that's true, Morgan Stanley says investors are far too optimistic right now. In short, Wilson wrote that investors who see conditions in markets right now as positive for stocks, especially for tech, are making a mistake.

☆ Another Banking Crisis Was Predictable
▼ + stars: | 2023-03-18 | by ( Mary Anastasia O Grady | ) www.wsj.com time to read: 1 min

The economist Allan Meltzer liked to say that “capitalism without failure is like religion without sin. It doesn’t work.” After the 2008 financial crisis, Meltzer worried that bank bailouts were undermining public support for capitalism. He feared that politicians would steer the financial system toward more government regulation and away from the natural regulatory power of market competition. More Americans would begin to believe that only the state could protect them from the instability that comes with economic freedom. Sure enough, in 2010 Congress passed the Dodd-Frank Act, which promised “to promote the financial stability of the United States by improving accountability and transparency in the financial system, to end ‘too big to fail,’ to protect the American taxpayer by ending bailouts, to protect consumers from abusive financial services practices, and for other purposes.”

☆ Confused about the bank meltdown? Here’s how to speak Wall Street
▼ + stars: | 2023-03-18 | by ( Ramishah Maruf | ) edition.cnn.com time to read: +4 min

New York CNN —Wall Street can seem bewildering, given its sheer amount of jargon, banking terms, and acronyms. When a bank fails, the standard insurance amount is $250,000 per depositor, per insured bank, for each account ownership category. Deposits, withdrawals and bank runsDeposits are cash you put into your bank account, and withdrawals are money that’s taken out. Though it’s pretty rare to enact it, the FDIC used this exception to take over SVB and Signature Bank last week. Discount windowThis is the Fed’s main way to directly lend money to banks and provide them more liquidity and stability.

☆ Confused about the First Republic Bank mess? Here’s how to speak Wall Street
▼ + stars: | 2023-03-18 | by ( Ramishah Maruf | ) edition.cnn.com time to read: +4 min

But as concerns mount that the Federal Deposit Insurance Corporation will take receivership of troubled First Republic Bank, potentially the third US bank to fail after the collapse of Silicon Valley Bank and Signature Bank, the business of finance has become a national concern. When a bank fails, the standard insurance amount is $250,000 per depositor, per insured bank, for each account ownership category. Deposits, withdrawals and bank runsDeposits are cash you put into your bank account, and withdrawals are money that’s taken out. Loan-to-deposit ratioIf a bank has a ratio above 100% (like First Republic), then it loans out more money than it has deposits. Though it’s pretty rare to enact it, the FDIC used this exception to take over SVB and Signature Bank.

☆ Morning Bid: Shock and awe - or mayday?
▼ + stars: | 2023-03-17 | by ( ) www.reuters.com time to read: +4 min

A look at the day ahead in U.S. and global markets from Mike DolanMarkets are struggling with whether to be relieved by the sheer scale of Thursday's U.S. bank rescue or be terrified by it. But there was little confidence the rising financial stress would dissipate quickly from here. The discount window jump crashed through a prior record of $112 billion during the banking collapse of 2008. What's more, 75 basis points of Fed rate cuts are still priced between a peak of 5% in May to yearend. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

"Not only are these big banks not sitting around and waiting for the phone to ring, they are also being proactive." Amid the nation's most troubling turmoil in banking since the global financial crisis nearly 15 years ago, the big banks are flexing their collective muscle. The 2008 financial crisis humbled the banking behemoths; the 2023 crisis of regional banks has now only cemented their power. For an increasingly stretched financial system, the big banks provide a needed stability. The flight to safety that is benefiting the big banks will have a cost, however.

☆ There Is a Cost to Moral Hazard
▼ + stars: | 2023-03-16 | by ( James Mackintosh | ) www.wsj.com time to read: 1 min

Usually, bailouts of banks lead to widespread concerns about moral hazard, the idea that if you save someone from the consequences of their actions, they take even bigger risks. This time a popular view being expressed by many commentators is that bank depositors, even big sophisticated businesses with large uninsured deposits at risk, can’t be expected to police how their banks behave. The view is both right and horribly wrong. And it matters for how we as a society decide the banking system should look in the wake of the failures of Silicon Valley Bank and smaller Signature Bank.

☆ US FDIC may need temporary guarantee for all bank deposits -ex chief Bair
▼ + stars: | 2023-03-16 | by ( David Lawder | ) www.reuters.com time to read: +3 min

WASHINGTON, March 15 (Reuters) - The Federal Deposit Insurance Corp may need to seek temporary guarantees for all uninsured U.S. bank deposits to stem a drain of funds from small and regional U.S. lenders following deposit bailouts for failed banks SVB Financial and Signature Bank, former FDIC chair Sheila Bair said on Wednesday. "My biggest fear now is that that lack of trust in the banking system takes hold and uninsured deposits start fleeing banks of all sizes to the biggest banks, just making them bigger again," Bair said. If that continues, the FDIC and the U.S. Treasury should seek "streamlined" authority from Congress to guarantee all uninsured deposits and transaction accounts, which handle client company payroll and operations, she said. A Reuters review of company filings and FDIC data showed that San Francisco-based First Republic had uninsured deposits of $119.5 billion, or 68% of its total. Bair said she did not view Silicon Valley Bank or Signature Bank as systemically important institutions, adding that they could have been resolved through FDIC's normal takeover process, with a "haircut" for uninsured deposits.

☆ Sell any bounce in the banks, warns BCA Research
▼ + stars: | 2023-03-16 | by ( Tanaya Macheel | ) www.cnbc.com time to read: +1 min

With unprecedented volatility in the market this week, thanks to the recent U.S. bank closures and fear of contagion spreading across Europe, the BCA Research team is doubtful banks can stay profitable in the foreseeable future. The KBW Regional Banking Index is higher by just 0.2% Thursday. There also could be an opportunity for investors to use potential bounces to underweight the industry, she added. KBWR 1D mountain KBWR Regional Bank index "We believe that this remains the most prudent course of action, selling banking exposure into a potential bounce," she wrote. "To capture the best exit point, we are putting banks on a downgrade watch from current neutral position."

☆ How 'bailout' became a dirty word
▼ + stars: | 2023-03-15 | by ( Nathaniel Meyersohn | ) edition.cnn.com time to read: +5 min

New York CNN —“Bailout” became a curse word in American politics following the 2008 global financial crisis, fueling backlash among people who felt the risks and potential consequences of capitalism didn’t apply to big corporations or the wealthy. A financial bailout is generally considered to be providing compensation for losses when there was reckless, irresponsible or nefarious behavior at play, he added. “Bailout is a dirty word. The politics of bailoutsBailout politics have returned in response to the Silicon Valley and Signature meltdown. If those depositors are made whole, that would constitute a bailout, he said.

☆ A Silicon Valley Bank employee attempted to serenade Elon Musk with an Alanis Morissette parody, pleading for the billionaire to buy the failed bank
▼ + stars: | 2023-03-15 | by ( Aidan Pollard | ) www.businessinsider.com time to read: +2 min

Many SVB employees cheered on a post calling for Elon Musk to buy the bank with a parody of an Alanis Morissette song. In a post to LinkedIn, 11-year SVB employee Mona Maitra called on Musk to buy the bank using a parody music video of Alanis Morissette's "Ironic" filmed in a Tesla. commented someone also identified as a Silicon Valley Bank employee. The lighthearted post comes after the highly public collapse of Silicon Valley Bank Friday, which brought lengthy and wide reaching debate over how to handle the bank's failure. "No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer."

☆ Americans are wary of bailouts as banking concerns mount -Reuters/Ipsos
▼ + stars: | 2023-03-15 | by ( Jason Lange | ) www.reuters.com time to read: +3 min

Stock markets have swooned around the world since Silicon Valley Bank collapsed on Friday as worried customers pulled their deposits. In a 2012 Reuters/Ipsos poll, only 20% of Republicans and 53% of Democrats said they supported bailouts. About half of respondents to the Reuters/Ipsos poll said they had heard at least a fair amount about Silicon Valley Bank's implosion. The Reuters/Ipsos poll showed broad bipartisan support for Washington backing bank deposits. The Reuters/Ipsos poll, conducted online, surveyed 1,004 people nationwide and had a credibility interval of about 4 percentage points in either direction.

☆ Americans broadly support Biden bailing out Silicon Valley Bank even if Washington can't agree if it was a bailout: poll
▼ + stars: | 2023-03-14 | by ( Brent D. Griffiths | ) www.businessinsider.com time to read: +4 min

Americans broadly support bailing out Silicon Valley Bank, according to early polling. Respondents were specifically asked if they supported or opposed the decision "to bail out customers who had deposited money with Silicon Valley Bank after the bank collapsed last week." Fifty-four percent said Silicon Valley Bank's collapse makes it at least somewhat likely that a broader financial crisis is afoot. Silicon Valley Bank collapsed late last week, becoming the second-largest bank failure in US history. Administration officials have stressed that the way Silicon Valley Bank and Signature Bank were rescued should not be considered bailouts by the 2008 standard.

☆ VIEW US intervenes to shore up SVB deposits, stem financial fallout
▼ + stars: | 2023-03-13 | by ( ) www.reuters.com time to read: +10 min

March 13 (Reuters) - The U.S. government announced actions to shore up deposits and stem any broader financial fallout from the sudden collapse of tech startup-focused lender Silicon Valley Bank (SIVB.O) (SVB), sending U.S. stock futures higher. "The market turbulence sparked by SVB has upended rising market expectations on the Fed rate path. The fact that SVB and Signature Bank depositors will be made whole is critical in maintaining trust in the financial system and should help stem contagion fears this week. But it also means that 50 basis points (a possible Fed interest rate hike) is off the table." Given what's happened in the U.S. financial system, a 25 basis point hike is more likely than a 50 basis point hike."

☆ Wall Street — not taxpayers — will pay for the SVB and Signature deposit relief plans
▼ + stars: | 2023-03-13 | by ( Christina Wilkie | ) www.cnbc.com time to read: +3 min

WASHINGTON — Plans announced Sunday to fully reimburse deposits made in the collapsed Silicon Valley Bank and the shuttered Signature Bank will rely on Wall Street and large financial institutions — not taxpayers — to foot the bill, Treasury officials said. The DIF currently has over $100 billion in it, a sum the Treasury official said was "more than fully sufficient" to cover SVB and Signature depositors. To that end, federal officials strongly pushed back on the idea that the plans for SVB and Signature constituted a "bailout." Sen. Bernie Sanders, I-Vt., insisted that "If there is a bailout of Silicon Valley Bank, it must be 100 percent financed by Wall Street and large financial institutions." On Sunday afternoon, Treasury approved of plans that would unwind both SVB and Signature Bank, based in New York, "in a manner that fully protects all depositors."

☆ DeSantis and other prominent Republicans blame 'woke' politics for Silicon Valley Bank's collapse instead of bankers miscalibrating risk
▼ + stars: | 2023-03-13 | by ( Brent D. Griffiths | Nicole Gaudiano | Juliana Kaplan | ) www.businessinsider.com time to read: +6 min

Some Republicans blamed "woke" investment strategies for Silicon Valley Bank's downfall. Economists and banking experts so far have chalked up Silicon Valley Bank's failure to much more apolitical circumstances. Silicon Valley Bank then had to sell its assets at a loss to fork over cash it didn't have, an increasingly untenable chain reaction that ended only when regulators shut the institution down. Regulators closed the Silicon Valley Bank on Friday, a stunning break to a period of relative banking stability in the wake of the 2008 financial crisis. "I don't know if making money's now woke," Baker said.

☆ It's crystal clear now: More banks are going to fail
▼ + stars: | 2023-03-13 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +4 min

It is likely that more bank failures are coming after the collapse of Silicon Valley Bank. "There's no doubt in my mind: There's going to be more. Investors are clearly nervous about the potential for a cascade of bank failures, reflected in the stock price of a handful of regional banks on Monday. Biden, Yellen vow no bailoutsThough depositors have been made whole in both recent failures, banks and their shareholders should be prepared for the government to let them fail, and should not count on anything resembling a 2008-style bailout. "And the reforms have been put in place means that we're not going to do that again."

☆ Instant view: US intervenes to shore up SVB deposits, limit financial fallout
▼ + stars: | 2023-03-13 | by ( ) www.reuters.com time to read: +11 min

March 13 (Reuters) - The U.S. government announced actions to shore up deposits and stem any broader financial fallout from the sudden collapse of tech startup-focused lender Silicon Valley Bank (SIVB.O) (SVB), sending U.S. stock futures higher. ALVIN TAN, HEAD OF ASIA FX STRATEGY, RBC CAPITAL MARKETS, SINGAPORE:"Markets remain unsettled from the SVB failure. "The market turbulence sparked by SVB has upended rising market expectations on the Fed rate path. ANTHONY SAGLIMBENE, CHIEF MARKET STRATEGIST, AMERIPRISE FINANCIAL, TROY, MICHIGAN:"It was imperative that regulators stepped in and decisively acted before markets around the world opened for the week. GREG MCBRIDE, CHIEF FINANCIAL ANALYST, BANKRATE:"While the Fed has talked about a lot in the past year, until today it has been in the context of monetary policy.

Search resuls for: "Bailouts"

25 mentions found